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Eliminate Credit Card Debt

Being in credit card debt is no laughing matter, but it’s also becoming an increasingly common occurrence in America.

Currently, the average household in the United States is OVER $15,000 in debt. Paying back that kind of money is going to require you to have a solid strategy in place, not to mention financial discipline and patience.

A golden rule that you would be wise to follow is to ensure that your credit card balance is under 30% of your total limit. Otherwise, your credit score will be negatively impacted. In addition, if you fail to pay anything on a billing cycle, the creditor will report it to each of the three credit reporting bureaus (Equifax, Experian, and TransUnion), and you will also see your credit score drop.

But while making timely payments and keeping your balance below the 30% of your credit limit can help to keep your credit score from falling significantly, things will still be far better for you both personally and financially if you can pay off your credit cards when you use them to keep a $0 balance. To bring you down to that $0 in order to pay off your credit card debt completely, we’re going to discuss a series of tips and strategies in this article that you will be able to use.

One more thing that should be noted before we go on is that just because you own (and use) a credit card doesn’t mean that you have to go into debt. So long as you only use your credit cards for things that you can afford and pay on time, you can build credit and accumulate rewards points without having to go into debt.

This is something to keep in mind as you seek to get out of credit card debt, because as we’ll talk about later, canceling your credit cards after you pay them off can actually hurt your credit score.

Can You Pay Off Your Credit Card Debt?

Yes, you most certainly can. Even if you’re at or over the average of being $15,000 in credit card debt, you can still pay all of it off with the right strategies and discipline.

That being said, many people who are confronted with such a daunting size of debt choose to avoid confronting it by simply making the minimum monthly payment.

While making the minimum monthly payment on time each month is certainly better than taking no action at all, it’s still not nearly as preferable as actually taking massive action to pay all of that debt off using strategies that we will soon be discussing.

This is because credit card interest adds up, and it adds up quickly. The vast majority of creditors will require you to make a minimum monthly payment of one to two percent. Meanwhile, most credit cards will have a 15% to 25% APR (annual percentage rate).

This means that if you are thousands of dollars in credit card debt now, it would take you decades to pay all of it off if you only make the minimum monthly payment of 1-2%, and furthermore, you’d likely end up paying thousands if not tens of thousands of dollars in interest.

The best way to pay off credit card debt is to pay it off as quickly as possible. Even if you can’t afford to pay all of it off at once, you should still pay as much every month as you possibly can. This will reduce the amount of time it takes to pay off the cards in addition to helping you save money.

But what are the best strategies you can use?

Strategy #1 - Pay The Highest Interest Credit Card Off First

One of the most popular strategies for paying off credit card debt that is recommended by a wide variety of financial experts is to focus on paying off the credit card with the highest interest rate first.

The logic behind this strategy is that by paying off the highest interest credit card first, you will save money by paying less in interest rate. The idea is that you take as much extra cash as you can each month and use it to pay back debt on that particular credit card.

As for your other credit cards, simply make the minimum monthly payments on them (or perhaps a little more than the minimum payment), while focusing your money and energy on getting that higher interest card paid off first.

Strategy #2 - Use The Debt Snowball Method

An alternative to the strategy of paying off the credit card with the highest interest rate first is to use the debt snowball method, or paying off the credit card with the smallest balance first and then working your way up from there.

Even though this is usually a more expensive way to pay back your debt, since your cards with higher balances and interest rates will continue to accrue debt, the snowball method is strongly and passionately advocated by many financial experts such as Dave Ramsey because of the massively positive psychological impact it has on you.

When you focus on paying back the credit card with the highest interest rate first, it can be a daunting task and you may end up losing motivation to actually pay it off.

But in contrast to this, paying off the credit card with the lowest balance first can help give you a massive sense of accomplishment so you’ll feel more motivated to pay off the next smallest balance and so on and so on until all of your debt is actually paid off.

Meanwhile, as you work on paying back the smallest balances first, you would continue to make the minimum monthly payments on each of your other cards.

Strategy #3 - Transfer Your Debt To A Balance Transfer Card

While transferring your debt from one credit card to another is obviously not going to eliminate your debt in one fell swoop, if you play your cards right, this method can help to greatly save on the amount of money you’ll pay in interest rates.

Most credit card issuers offer what is called a ‘balance transfer card’ with a 0% APR introductory rate. While this 0% APR will expire, usually after twelve to eighteen months, the idea is that you can transfer your existing credit card debt to the balance transfer card and then work on paying it off without owing anything in interest.

The only real limit to this is you have to make sure that your balance transfer card comes from a separate issuer than your existing card issuer. You’ll also have to pay a small balance transfer fee, which usually amounts to be anywhere from two to five percent.

Of course, you want to make sure that you carefully read the fine print of any balance transfer offer you are considering. Specifically, you need to focus on how long the 0% APR is for, and what the balance transfer fee is.

Strategy #4 - Consider A Loan To Consolidate Your Debt

Another way to consolidate your debt, rather than using a balance transfer card, will be to take out a personal loan.

Specifically, you can try and transfer all of your credit card balances into a single personal loan called a debt consolidation loan.

You’ll then agree to make a monthly payment at a specified interest rate and for a specified amount of time.

The advantage to using a debt consolidation loan isn’t just to help you save you interest, but also to give you a specified date by which all of your debt will be paid off.

One limit to using a debt consolidation loan is you have to commit to it. The monthly payment that you and the lender agree to is the exact monthly payment that you will have to make, and it will be larger than your credit card minimum monthly payments were.

In addition, the interest rate you manage to secure may or may not be favorable. It really comes down to what your credit scores are. So if you have a low score, you may not qualify for a favorable rate, and it may end up being more financially beneficial to just pay back your credit card issuers directly using any of the previous strategies.

Again, read the fine print of your agreement. Pay close attention to the APR you qualify for, the amount of time that you have to pay back the loan, and if you can afford to make the monthly payment. Also check into what the penalty fees are for failing to make the monthly payment on time and for paying off the loan early.

Strategy #5 - Seek The Assistance of a Debt Management Plan

If you’re really at a loss for what to do and if things seem helpless, the best thing you can do will be to seek outside help, such as through a non-profit credit counseling agency who can evaluate your situation for you and sign you up with a debt management plan.

How a debt management plan will work is you will essentially pay your selected counseling agency a monthly payment for handling your debt for you. Your credit counselor will work with your creditors to consolidate your debt and hopefully negotiate a new interest rate for you.

Your counselor will then pay back the debt, and you will pay money each month to the counselor until the amount of debt you transferred over to them is paid off.

This will or won’t be a good strategy depending on your current situation and what terms your counseling agency of choice can negotiate with your creditors. In addition, chances are good that some of your creditors will agree to work with the counseling agency but others will not, so it’s not likely that you’ll be able to pay back all of your debt with this method.

If your credit card debt is high enough that you are considering this option, you will also want to consult with a bankruptcy attorney to discuss your options. Often, clients wait until the last possible moment to consider bankruptcy, but they would have benefited by getting in to see an attorney sooner.

Do Not Close Your Credit Cards

One last piece of advice to touch on what we mentioned in the introduction is to not close your credit cards after paying them off.

While it may seem like a wise idea to do so in order to avoid the temptation of going back into further debt, the truth is that your credit score is heavily impacted by your credit utilization rate, or the amount of credit that you are using set against the total amount of credit you have.

If you close a credit card, this will create less overall credit, and your debt utilization ratio will increase, which hurts your credit score.

A better strategy will be to either use your credit cards wisely by paying them off as soon as you buy something with them, or, if you really want to avoid credit cards entirely, you can make just one small purchase with each one every month (such as a cup of coffee) and then pay those off to keep your credit cards active (many issuers will shut your credit cards down if they go with a long enough period with no activity, which will also hurt your score),


If you have a large credit card balance or balances, then getting completely out of credit card debt is not going to happen overnight. Just as it may have taken you a long time to get into that much debt, it will likely take you a long time to get out of it as well.

The good news is that by applying discipline and utilizing some of the strategies and tips that we have covered in this article, you can pay back your debt sooner rather than later, which can help give you relief in addition to helping you save money.

Remember, the single most important thing is to pay back as much of your credit card debt as you can afford each month, and to do so consistently. Always try to pay more than the minimum monthly payment in order to owe less in interest.



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